Alibaba beat estimates on revenue last quarter, driven by a surge in cloud computing.
Revenue was up 5% year-over-year to CN¥247.80 billion, above LSEG estimates of ¥242.65 billion. Net income dropped 53% to ¥20.61 billion, due to investments in quick commerce and technology weighing on its adjusted EBITA.
“We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce,” said Alibaba CEO Eddie Wu.
“With our significant strategic investments in these areas, our two core businesses of AI + Cloud and consumption continued to deliver strong growth this quarter.”
The company's International Digital Commerce Group segment saw revenue grow 10% to ¥34.80 billion. Its adjusted EBITA profit was ¥162 million, which it credited to logistics optimisation and investment efficiency.
Alibaba’s China E-commerce Group’s revenue was up 16% to ¥114.77 billion, driven by a 60% increase in quick commerce revenue.
Revenue for its Cloud Intelligence Group segment rose by 34% to ¥39.82 million. Its AI-related product revenue grew by triple digits year-over-year for the ninth consecutive quarter, though it did not disclose an exact value.
Its Qwen AI assistant app reached 10 million downloads in its first week after launching in public beta this month.
The company has invested around ¥120 billion in capital expenditure towards cloud infrastructure and AI over the last four quarters. Alibaba said in September that it would increase its AI spending beyond the ¥380 billion over three years that it previously announced in February.
Alibaba’s consolidated adjusted EBITA dropped by 78% to ¥40.56 billion, with income from operations down 85% to ¥35.25 billion.
Alibaba’s (NYSE: BABA) shares closed 2.3% lower at US$157.01. Its market capitalisation is $378.88 billion.
